BERLIN, Germany (AP) -- Carmaker Daimler AG and utility RWE AG said Friday they would begin a joint electric car and charging station test project in the German capital, called "E-Mobility Berlin."

It is the second electric car test project initiated by Daimler, after electric Smart cars started a trial as fleet vehicles for the police and other services in London last year.

The companies said during a joint news conference in Berlin, accompanied by politicians including German Chancellor Angela Merkel, that Daimler would provide more than 100 electric cars from their Mercedes-Benz and Smart brands, as well as service for the cars.

RWE said it will supply the electricity, control the system, and handle the development, installation and operation of about 500 charging stations.

The program will begin testing at the start of next year and should come on line at the end of 2009. Daimler said it would choose some fleet and private customers for the program over the next several months.

The German government is supporting the program because of its significance in the pursuit of sustainable mobility, the companies said.

Merkel called it "a truly groundbreaking project," for the capital, the auto industry and for utilities.

"'E-mobility Berlin' will be an important part of the strategy of the government for electric mobility," German Transport Minister Wolfgang Tiefensee said after the announcement Friday.

"Our joint initiative is a good example of what can be achieved when policy makers, energy suppliers and the automotive industry all work together toward the same goal," said Dieter Zetsche, the chief executive of Stuttgart-based Daimler.

Zetsche added that he's convinced the future of mobility is green, and that "German industry has all the assets for assuming a leading role in this direction."

Daimler's Smart Electric Drive and Mercedes-Benz electric vehicles will be driven with lithium-ion batteries developed specifically for use in the cars.

Daimler said the technology's smaller and lighter batteries provide a greater range and a shorter charging time than conventional batteries. The batteries have a range of about 60 miles, and 90 percent of German citizens generally drive less than that distance on their everyday trips, Daimler said.

The automaker said it will launch the lithium-ion battery technology in serial production of the Mercedes S 400 BlueHYBRID next year.

Both companies said drivers will use a special in-car communication system to pay for refueling at the intelligent electricity charging points, allowing "effective, customer-friendly and convenient everyday operation."

Essen-based RWE said the charging points will be installed at customers' homes, workplaces and in public parking areas.

"In addition, business-to-business partners such as shopping centers, car park operators and fleet customers can be connected into the infrastructure," said Juergen Grossmann, the CEO of RWE. "The accounting system should be as simple and convenient as when using one's mobile phone," he said.